- Associated Press - Monday, January 20, 2020

Rapid City Journal, Jan. 15

State of the State is hopeful, open-ended

In her second State of the State address, Gov. Kristi Noem didn’t shy away from West River issues.

She honored two Sturgis police officers who saved a resident’s life through acts of bravery.

“Dense smoke was pouring from the open doors and windows, the two officers entered the home and located the resident who was already unconscious. With water-soaked t-shirts wrapped around their faces to help them breathe, the officers dragged the unconscious man down a stairway and out of the home – just seconds before the fire collapsed the structure,” Gov. Noem said. “Doctors later told the rescued man that he would not have survived another minute in the heavy smoke.”

She also talked about the impact the South Dakota School of Mines and Technology will have on the state this year and in years to come.

“Out in Rapid City, folks are building an even stronger relationship between the School of Mines and the community,” Noem said. “Expected to be completed in 2020, the new Ascent Innovation Center will be open to small business owners who will be able to use the center to house start-up companies and technologies. Its strategic location between School of Mines and Main Street should ignite the redevelopment of that part of town. We believe this center will be instrumental in attracting the next generation of workers to live in South Dakota.”

She also has longer range plans for the university.

“Over the next 10 years, private industry, South Dakota State University, the School of Mines and Technology, and the state will partner to support research and development in bioprocessing,” she said.

Noem also touted her first-year project of investing in rural broadband. She said the $5 million invested by the state had resulted in more than $25 million in investments that brought broadband to 650 homes and 150 businesses. That is a game-changer for those who benefit, but it carries a big price tag of more than $31,250 per location that she mentioned.

It is hard to get a return on that investment, but she is asking legislators to make the investment again this year to try to help more rural families get connected.

Another topic that is carrying over to this year from Noem’s first is the legalization of industrial hemp. Noem vetoed the measure last year and that veto was not overturned. With momentum building behind the idea, Noem has released four guardrails that must exist before she will go along with hemp legalization.

She seemed ready to put the issue behind her.

“Given all that we need to accomplish this year, if this is going to get done, my hope is that we can do it in the coming days so we can focus on our other priorities,” she said.

House Bill 1008 - which is co-sponsored by Rep. Tim Goodwin of Rapid City - is already filed and awaiting action in committee.

There weren’t a lot of big, new ideas in this year’s address. A lot of what Noem discussed included continuing programs like the rural broadband initiative, the predator trapping plan, and handling hemp early in the session.

Noem touted the state’s tourism economy and its ability to help create revenue for the state.

Speaking of revenue, the governor said financial reports have been positive since she released her budget in December. Because of that, she hopes to address the biggest issue she faced after its release - no raises for state employees and teachers.

“Since my budget address, revenues have been slightly better than expected. What this means is that we may have extra flexibility to achieve the things we want to accomplish,” she said. “My number one priority with additional, ongoing money will be to provide increases to K-12 schools, providers, and state employees.”

Most of this year’s address focused on continuing the work from Noem’s first year and left legislators with a blank slate instead of a detailed agenda of goals to accomplish.

The 2020 session has officially begun. Noem sounded hopeful tones as she kicked it off. We’ll see how hopeful residents are in a couple of months when the session ends.


Argus Leader, Sioux Falls, Jan. 10

Message to state legislators - show us the money

There’s a reason the Argus Leader editorial board isn’t proposing a wish list for lawmakers as the 2020 session of the South Dakota State Legislature opens this week.

Legislators have already been talking about their “No. 1 priority”: to find ways to fund increases for education, state employees and nursing homes, none of which Gov. Kristi Noem has proposed in her 2021 state budget. We anticipate familiar hand-wringing over the dangerous lack of mental health care access, the meth epidemic and the growing problem of drug-related crime. The precarious state of our family farms. The devastating effects of increasingly extreme weather events. Never mind evergreen proclamations about positioning South Dakota for a prosperous future.

There’s no point in our adding emphasis to the need to meet these challenges. All of the fixes require increased revenue, and that doesn’t square with the one true priority of South Dakota’s ruling party: fiscal austerity at all costs, no matter how much or who it hurts. Cutting expenditures and tightening our belts until our spines ache.

Ensuring the state has a balanced budget while funding its priorities is always a main topic during the legislative session, but it’ll be especially front and center in 2020, according to Senate Majority Leader Kris Langer. State leaders need to be fiscally responsible, but they’ll increase the funding for teachers and state employees – if they can, according to House Majority Leader Lee Qualm.

Sure, they feel bad that we can’t afford nice extras like counseling suicidal farmers or keeping our parents and grandparents in the communities where they’ve lived their entire lives. But, they say, shaking their heads sadly, what can we do? We need to stay within our means.

There is, in fact, something they can do. Our elected leaders must start working the other side of the ledger, and the people of South Dakota need to hold our legislators’ feet to the fire to expand the boundaries of state revenues, especially given the $20 million cut to the budget as the state’s internet access tax expires. We are hamstrung by legislative and executive unwillingness to entertain the possibility of growing our means.

The ideology of “no taxation” has trumped every other care and consideration in Pierre for far too long. We limp along on the meager means of revenue from a sales tax, including on food, that disproportionately burdens those of us who can least afford it. The “business friendly” rating the Governor’s Office of Economic Development ballyhoos comes at great cost to increasingly desperate South Dakotans.

It’s folly to rely exclusively on cutting waste and chasing efficiencies to improve the lives of our families, friends and neighbors across the state. It’s incumbent upon lawmakers to explore opportunities to change the dynamic and explore modes of increased revenue, as other states have done:

- Sports gambling. More than a dozen states have legalized sports betting and are reaping the benefits. Iowa brought in $1.1 million in sales tax in its first four months of legal sports gambling. Tweaking how that sales tax is structured could optimize the state share of the impressive revenues seen so far.

- Mansion taxes. South Dakota’s relatively miniscule real estate transfer tax of $0.50 per $500 of value – one-tenth of 1% – could be revised to a bracketed system, with slight increases in rates at higher value breakpoints. Several states have implemented or increased this tax, but Washington state in particular may provide a good template to follow.

- Getting creative with trust laws. Creative lawmaking has turned South Dakota (dubbed “the new Switzerland”) into the top tax-haven destination for the ultra-rich to put their trust funds. The state only collected $1.1 million in fees from the $175 billion in trusts parked here in 2015. Legislators can find a way to net more than .0006% of what is estimated will be $355.2 billion in trusts by the end of 2020 without sacrificing our ranking as a safe harbor.

- Corporate income tax. Taking a look at the huge tax breaks we award businesses that are located here could allow more South Dakotans to reap the benefits a corporate-friendly climate.

- And, yes, a modest personal income tax. South Dakota is one of only seven states that doesn’t have a state income tax, along with top trust-haven pals Alaska, Nevada and Wyoming. The “tax we do not speak of” could use further study to determine future viability.

The governor’s recent grudging turnaround on industrial hemp, in the face of a nearly certain veto override, throws South Dakota farmers another lifeline as they struggle with adverse weather, ongoing trade wars and low prices. How much growing hemp will contribute to state coffers is uncertain, though.

We recognize the extreme lack of appetite on the part of lawmakers to enact new or increased taxes. But our lack of state revenue isn’t the fault of hardworking South Dakotans. We have the most families where both parents work in the country, and our rate of wage-earners working multiple jobs also ranks among the highest nationwide. It’s time for our Republican lawmakers – for they are the ones running the show in Pierre – to buckle up and get to working as hard as the voters of this state do.

Until they get creative and start giving way on the belt-tightening dogma that created this financial bind, any hope of effective legislation stemming from this year’s legislative session is mere folly.


Yankton Daily Press & Dakotan, Jan. 16

A sobering thought: Prohibition hits 100

Let’s raise a glass in toast of a milestone, for today (Friday) is the 100th anniversary of the 18th Amendment going into effect, which gave America the great socioeconomic experiment known as Prohibition - the outlawing of the sale of most non-medicinal alcoholic beverages across the country.

Never have such good intentions gone so horribly wrong and so many grand visions been undone by unforeseen consequences. The effort to mandate sobriety upon the land merely channeled much of the demand elsewhere. It gave birth to illicit cottage industries such as bootleg operations and speakeasies. It arguably spawned a rise of criminal activity that turned militant and murderous, and also propelled crime bosses to unprecedented power. (Some historians have disputed this, but there is no doubt that criminal elements saw vast opportunities to profit off a thirsty public.) Prohibition also had a significant economic impact on tax revenues and on agriculture, all of which became even more painfully pronounced after the Great Crash of 1929.

(To be fair, Prohibition did have some successes. It reportedly cut the national rates of cirrhosis deaths and cases of alcoholic psychoses.)

Prohibition’s good intentions were also fueled by at least one bad intention. One thing that made the law attractive at the time was that many of the biggest beer brewers in the U.S. were German immigrants, and coming off the bitter experiences of World War I, it apparently seemed like a good way to marginalize “those people.”

And Prohibition also stands alone in our history as the only constitutional amendment that has ever required another amendment (the 21st) to undo it, which happened in 1933.

Nevertheless, Yankton appeared to receive this news with cautious hope at the dawn of the new dry age.

“The National Prohibition Act is at last a working law,” the Press & Dakotan editorialized a century ago today. “But every thotful (sic.) citizen realizes that there may be a big gap between declaring a law effective and really enforcing it.” The piece noted that the public had been asked for its full cooperation and to work with law enforcement to “back up authorities.” The paper concluded, “The people demanded prohibition. Now that they have it - on paper - let the people prohibit!”

The details of it all are fascinating and far too extensive to recount here. (If you yearn for a short course, Ken Burns’ fascinating documentary “Prohibition” gives you a great taste of that age.)

However, I want to mention two minor notes.

According to my family history, I had a grandfather who was a bootlegger. He wasn’t a flashy, spit-and-polish operator; he was, by most accounts, a coarse man trying to make a buck during the Great Depression. I think I was told once that he hid his product out in the country somewhere between Menno and Olivet, but I’m not sure of that and it really doesn’t matter now. However, it seemed to matter somewhat back then: I was told a story that a federal agent came around to my grandfather’s house in Menno one day, and my dad, then about 5, was sitting on the outside stoop. The agent apparently tried to bribe my father with candy if he would reveal where my grandfather kept his hooch. My dad, who was always kind of quiet anyway, just shook his head and never spilled the beans. I’m not sure what became of the candy.

Also, the end of Prohibition gave rise to an “intoxicant” that became a staple of area life: low-point beer, a dishwater-y brew that was limited to 3.2% lcohol content by weight. (I came across a newspaper article published just as Prohibition ended declaring that government researchers had scientifically proven that people couldn’t get drunk on low-point beer. I witnessed several staggering, retching souls in my younger days that could have disproven that claim with humiliating vigor.) For decades, this beer was semi-affectionately known simply as “low point” or “3.2,” and you could buy it when you reached 18 (or so the law decreed, and let’s just leave it at that), while you had to wait until you were 21 to purchase “high point” beer, which of course made it temptingly forbidden fruit for the young and curious. All of that could be attributed in some degree to the Prohibition hangover.

The failure of Prohibition suggests that simply putting the hammer down with a law making something illegal is not an effective endgame. You’re better off trying to address the motivations behind the perceived problem rather than decree it away. If you outlaw drinking in a society filled with enough people who still want a drink every now and then, some people will figure out a way to get around that law.

Frankly, this lesson also applies in vastly varying degrees to issues ranging from marijuana to abortion. As the former shows and the latter once showed (and may show again), declaring something illegal doesn’t mean the issue goes away.

In hindsight, Prohibition was probably inevitable. Temperance movements were always on the march - according to author Bob Karolevitz, it was tried in Yankton several times even before 1920 - so if a ban on drinking hadn’t happened 100 years ago, it probably would have happened at some other point for mostly the same reasons, and it probably would have failed just as miserably.

Prohibition was a great quest for a better society, but the fact that this battle to save the nation’s soul is remember now for what we lost - as opposed to what we gained - tells you all you really need to know about a noble but ultimately doomed experiment.

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